The localized and segregated production of point defects in collision cascades results in increased defect recombination, substantial defect clustering and strong temporal fluctuations in the local point defect concentrations. In the present paper, the role of these effects in cavity nucleation is discussed. Possible reaction paths starting from vacancy clustering in cascades and leading to the formation of bubbles and voids are characterized, and the relative significance of these paths in comparison with the corresponding effects expected for homogeneous displacement damage is assessed. The main processes considered are: (1) direct void nucleation from three-dimensional vacancy aggregates ("microvoids") by stochastic fluctuations in the vacancy accumulation; (2) helium trapping by such microvoids which could reduce the effective helium diffusivity and enhance bubble nucleation; (3) collection of a surplus of vacancies in the cascade core by existing bubbles which could lead to a premature transformation from stable bubble growth to unlimited void growth. It is shown that, for realistic sizes, microvoids are unlikely to affect bubble and void nucleation significantly. The role of fluctuations in the frequency distribution of microvoid sizes is illustrated with the aid of "cascade significance plots" which indicate that tails of the microvoid size distribution may become more important than the commonly considered most probable or mean sizes. Future work is needed to clarify the role of microvoid size excursions. It is argued that, in the interesting temperature range of 1/3 to 1/2 of the melting temperature T(m), the efficiency of cascade induced fluctuations in the local point defect concentrations is substantially reduced by correlations between the self-interstitial and vacancy contributions.